diff --git a/project.ts b/project.ts
index 39aaf9dc..14507895 100644
--- a/project.ts
+++ b/project.ts
@@ -87,6 +87,13 @@ const project: CosmosProject = {
               type: "state_change",
             },
           },
+          {
+            handler: "handleTransferEvent",
+            kind: CosmosHandlerKind.Event,
+            filter: {
+              type: "transfer",
+            },
+          },
         ],
       },
     },
diff --git a/schema.graphql b/schema.graphql
index e0dd4bca..58b6313f 100644
--- a/schema.graphql
+++ b/schema.graphql
@@ -263,3 +263,10 @@ type ReserveMetrics @entity {
   totalFeeMinted: BigInt!
   allocations: [ReserveAllocationMetrics] @derivedFrom(field: "reserveMetrics")
 }
+
+type Balances @entity {
+  id: ID!
+  address: String @index
+  balance: BigInt
+  denom: String  @index
+}
\ No newline at end of file
diff --git a/src/mappings/constants.ts b/src/mappings/constants.ts
index 465b9302..6fab244b 100644
--- a/src/mappings/constants.ts
+++ b/src/mappings/constants.ts
@@ -24,6 +24,12 @@ export const VAULT_STATES = {
   LIQUIDATED: "liquidated"
 }
 
+export const TRANSACTION_FIELDS = {
+  RECIPIENT: 'recipient',
+  SENDER: 'sender',
+  AMOUNT: 'amount'
+}
+
 export const VALUE_KEY = b64encode("value");
 export const STORE_KEY = b64encode("store");
 export const VSTORAGE_VALUE = b64encode("vstorage");
diff --git a/src/mappings/events/balances.ts b/src/mappings/events/balances.ts
new file mode 100644
index 00000000..75b223e6
--- /dev/null
+++ b/src/mappings/events/balances.ts
@@ -0,0 +1,98 @@
+import { Balances } from '../../types';
+import { b64decode } from '../utils';
+import { CosmosEvent } from '@subql/types-cosmos';
+
+interface Attribute {
+  key: string;
+  value: string;
+}
+
+export interface DecodedEvent {
+  type: string;
+  attributes: Attribute[];
+}
+export const balancesEventKit = () => {
+  function decodeEvent(cosmosEvent: CosmosEvent): DecodedEvent {
+    const { event } = cosmosEvent;
+
+    const decodedData: DecodedEvent = {
+      type: event.type,
+      attributes: [],
+    };
+
+    event.attributes.forEach((attribute) => {
+      const decodedKey = b64decode(attribute.key);
+      const decodedValue = b64decode(attribute.value);
+
+      decodedData.attributes.push({
+        key: decodedKey,
+        value: decodedValue,
+      });
+    });
+
+    return decodedData;
+  }
+
+  async function addressExists(address: string): Promise<boolean> {
+    const balance = await Balances.getByAddress(address);
+    if (!balance) {
+      return false;
+    }
+    return true;
+  }
+
+  async function createBalancesEntry(address: string) {
+    const newBalance = new Balances(address);
+    newBalance.address = address;
+    newBalance.balance = BigInt(0);
+    newBalance.denom = '';
+
+    await newBalance.save();
+
+    logger.info(`Created new entry for address: ${address}`);
+  }
+
+  async function updateBalances(
+    senderAddress: string,
+    recipientAddress: string,
+    amount: bigint
+  ): Promise<void> {
+    const senderBalances = await Balances.getByAddress(senderAddress);
+    const recipientBalances = await Balances.getByAddress(recipientAddress);
+
+    if (!senderBalances || senderBalances.length === 0) {
+      logger.error(`Sender balance not found for address: ${senderAddress}`);
+      return;
+    }
+
+    if (!recipientBalances || recipientBalances.length === 0) {
+      logger.error(
+        `Recipient balance not found for address: ${recipientAddress}`
+      );
+      return;
+    }
+
+    const senderBalance = senderBalances[0];
+    const recipientBalance = recipientBalances[0];
+
+    const senderCurrentBalance = senderBalance.balance ?? BigInt(0);
+    const recipientCurrentBalance = recipientBalance.balance ?? BigInt(0);
+
+    senderBalance.balance = senderCurrentBalance - amount;
+    recipientBalance.balance = recipientCurrentBalance + amount;
+
+    await senderBalance.save();
+    await recipientBalance.save();
+
+    logger.info(
+      `Updated balances: Sender ${senderAddress} balance: ${senderBalance.balance}, Recipient ${recipientAddress} balance: ${recipientBalance.balance}`
+    );
+  }
+
+  return {
+    decodeEvent,
+    addressExists,
+    createBalancesEntry,
+    updateBalances,
+  };
+};
diff --git a/src/mappings/mappingHandlers.ts b/src/mappings/mappingHandlers.ts
index 891acd38..47604e6b 100644
--- a/src/mappings/mappingHandlers.ts
+++ b/src/mappings/mappingHandlers.ts
@@ -37,12 +37,14 @@ import {
   STORE_NAME_KEY,
   SUBKEY_KEY,
   UNPROVED_VALUE_KEY,
+  TRANSACTION_FIELDS
 } from "./constants";
 import { psmEventKit } from "./events/psm";
 import { boardAuxEventKit } from "./events/boardAux";
 import { priceFeedEventKit } from "./events/priceFeed";
 import { vaultsEventKit } from "./events/vaults";
 import { reservesEventKit } from "./events/reserves";
+import { DecodedEvent, balancesEventKit } from "./events/balances";
 
 // @ts-ignore
 BigInt.prototype.toJSON = function () {
@@ -163,3 +165,43 @@ export async function handleStateChangeEvent(cosmosEvent: CosmosEvent): Promise<
 
   await Promise.allSettled(recordSaves);
 }
+
+export async function handleTransferEvent(
+  cosmosEvent: CosmosEvent
+): Promise<void> {
+  const { event, block } = cosmosEvent;
+
+  if (event.type != EVENT_TYPES.TRANSFER) {
+    logger.warn('Not valid transfer event.');
+    return;
+  }
+
+  const balancesKit = balancesEventKit();
+  const decodedData: DecodedEvent = balancesKit.decodeEvent(cosmosEvent);
+
+  const recipientAddress =
+    decodedData.attributes.find(
+      (attr) => attr.key === TRANSACTION_FIELDS.RECIPIENT
+    )?.value || '';
+
+  if (recipientAddress && (await balancesKit.addressExists(recipientAddress))) {
+    await balancesKit.createBalancesEntry(recipientAddress);
+  }
+
+  const senderAddress =
+    decodedData.attributes.find(
+      (attr) => attr.key === TRANSACTION_FIELDS.SENDER
+    )?.value || '';
+
+  if (senderAddress && (await balancesKit.addressExists(senderAddress))) {
+    await balancesKit.createBalancesEntry(senderAddress);
+  }
+
+  const amount = BigInt(
+    decodedData.attributes
+      .find((attr) => attr.key === TRANSACTION_FIELDS.AMOUNT)
+      ?.value.slice(0, -4) || 0
+  );
+
+  balancesKit.updateBalances(senderAddress, recipientAddress, amount);
+}